Groupon Inc. may increase the price range of its initial public offering amid higher-than-expected demand for the shares from investors, three people with knowledge of the matter said.
An updated filing with a higher range may be filed with the U.S. Securities and Exchange Commission early next week should Groupon decide to increase the price, said one of the people, who declined to be identified because the information is private.
Groupon is floating a record-low percentage of its total outstanding shares in the offering, helping to stoke demand for the stock. Only 4.7 percent of the unprofitable company’s shares will be sold to the public, less than in any U.S. Internet- company IPO of more $200 million since at least 2000, according to Bloomberg data. The company is pitching the IPO to investors and aims to complete the offering on Nov. 3, the data show.
“I’m sure that it’s going to be fully subscribed,” said Brett Harriss, an analyst at Gabelli & Co. in Rye, New York, who was one of about 400 people attending the Groupon investor conference in New York City yesterday. “It’s a thin stock to start and, despite the recent criticism, they tell a good story.”
Groupon is seeking to raise as much as $540 million selling 30 million shares for $16 to $18 apiece, according to an Oct. 21 regulatory filing. Julie Mossler, a spokeswoman for Chicago- based Groupon, declined to comment on the stock offering.
In a typical IPO, investors receive shares worth 20 percent to 25 percent of the company, according to Paul Deninger, a senior managing director at investment bank Evercore Partners Inc. in San Francisco who isn’t involved in the Groupon sale.
A rising stock market can encourage companies to expand their offerings. The Standard & Poor’s 500 Index rallied 17 percent from Oct. 3 through Oct. 27, when volatility hit a two- month low.
By selling at a higher price, Groupon would become even more expensive than Amazon.com Inc. (AMZN) and Microsoft Corp. The current price range values the company at about five times projected 2012 sales, people familiar with the matter said last week. That compares with 2.9 for Microsoft and 1.5 for Amazon.com, according to data compiled by Bloomberg.
Groupon reported a net loss of $10.6 million attributable to the company in the three months through September, bringing losses in the first nine months of the year to $214.5 million, according to its filings.
LaShou Group Inc., the Chinese operator of a daily-deal website, filed yesterday to raise $100 million in a U.S. initial public offering. The Beijing-based company will offer American depositary receipts that will trade on the Nasdaq Stock Market under the symbol LASO.